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Dividends boost STI return to 3.1% in 2014 YTD

In the first 16 weeks of 2014, the Straits Times Index (STI) gained 2.7% on a price basis with another 0.4% added to this return by dividends. Seven STI stocks have distributed dividends in the year thus far. Over the next two weeks, as many as 13 STI stocks will go ex-dividend.

STI Stocks with upcoming ex-dividend dates either this week or next are Keppel Corporation, Sembcorp Marine, Thai Beverage, Singapore Tech Engineering, Sembcorp Industries, OCBC, UOB, Golden Agri-Resources, CapitaMalls Asia, City Developments, Wilmar, ComfortDelGro Corporation and CapitaLand.

Dividends are a share of the company’s profits distributed to shareholders of the company’s ordinary and preferred stocks. The dividend payout is determined by the company’s board of directors and may be paid out in cash or stock dividends.  For cash dividends, investors can opt for cheque payment or Direct Crediting Services (DCS).

Direct Crediting Services

DCS provides the investor with the convenience of receiving Singapore-dollar dividends in the designated bank account directly on payment date. DCS also extends to companies that report dividends in foreign currencies yet have a currency election service (investors can then opt for Singapore-dollars). This includes STI stocks Jardine Matheson Holdings, Jardine Strategic Holdings, Hong Kong Land Holdings, Hutchison Port Holdings Trust and Jardine Cycle & Carriage.

The above mentioned ‘currency election service’ sees the Issuers make the necessary arrangements to convert the dividend distribution from foreign currency into Singapore dollars at the prevailing market exchange rate. This converted amount will then be passed on to CDP for distribution.

Shareholders wishing to receive the final dividend in Singapore dollars must return the S$ Currency Election Notices, duly completed and signed, to CDP. In the absence of an election, shareholders will receive the final dividend in the defaulted currency.

Ex-Dividend Dates

To qualify to receive the dividend, investors must be holding the stock on the trading day before the ex-date. Thus, buyers of the stocks on the ex-date will not receive the most recently declared dividend. It does not matter if investors are holding the stock on the declaration date. What matters is they must be holding the stock on the trading day before the ex-date to qualify for the most recent announced dividend.

The seven stocks that have gone ex-dividend in the 2014 year thus far are highlighted in the table below. Among those seven stocks, the total return of Hutchison Port Holdings Trust was impacted the most by dividends. The STI stocks with the highest indicative dividend yields are Hutchison Port Holding Trust, CapitaMall Trust, Starhub, Singtel and SIA Engineering.

Short Name SGX Code Mkt Cap S$bn Px Chg Pct YTD Total Return YTD Dvd Ind Yld ICB Subsector Name
SINGTEL Z74

59.15

1.4

1.4

4.5

Mobile Telecommunications
JARDINE MATHESON USD J36

52.81

17.4

19.5

2.3

Diversified Industrials
JARDINE STRATEGIC USD J37

50.09

10.6

11.2

0.7

Diversified Industrials
DBS GROUP HLDGS D05

41.33

-1.2

-1.2

3.4

Banks
UNITED OVERSEAS BANK U11

34.80

3.9

3.9

3.2

Banks
OCBC BANK O39

33.13

-5.4

-5.4

3.5

Banks
WILMAR INTERNATIONAL F34

22.08

0.9

0.9

2.3

Food Products
HONGKONG LAND USD H78

20.18

15.1

17.3

2.6

Real Estate Holding & Development
KEPPEL CORP BN4

19.94

-1.8

-1.8

3.6

Oil Equipment & Services
JARDINE CYCLE & CARRIAGE C07

17.16

34.2

34.2

2.8

Specialty Retailers
GENTING SINGAPORE G13

16.09

-12.0

-12.0

0.8

Recreational Services
THAI BEVERAGE Y92

15.07

11.1

11.1

2.6

Brewers
CAPITALAND LTD C31

13.54

5.0

5.0

2.5

Real Estate Holding & Development
GLOBAL LOGISTIC MC0

13.14

-4.5

-4.5

1.4

Real Estate Holding & Development
SINGAP TECH ENG S63

12.31

-0.3

-0.3

1.8

Aerospace
SINGAPORE AIRLINES C6L

12.09

-1.2

-1.2

2.6

Airlines
SEMBCORP INDUS U96

9.65

-1.6

-1.6

2.8

Oil Equipment & Services
CITY DEVELOPMENTS C09

9.47

8.5

8.5

0.8

Real Estate Holding & Development
SEMBCORP MARINE S51

8.57

-7.9

-7.9

2.7

Oil Equipment & Services
CAPITAMALLS ASIA JS8

8.54

11.7

11.7

1.6

Real Estate Holding & Development
NOBLE GROUP N21

8.32

17.3

17.3

0.9

Diversified Industrials
GOLDEN AGRI-RESOURCES E5H

7.83

11.9

11.9

1.8

Farming & Fishing
SINGAPORE EXCHANGE S68

7.46

-4.0

-3.4

4.0

Investment Services
HUTCH PORT HLDGS USD* NS8U

7.36

-0.9

3.6

8.5

Transportation Services
STARHUB CC3

7.16

-3.3

-2.1

4.8

Mobile Telecommunications
CAPITAMALL TRUST C38U

6.95

5.5

7.0

5.4

Retail REITs
SINGAP PRESS HLG T39

6.61

0.2

0.2

3.6

Publishing
SIA ENGINEERING S59

5.52

-2.2

-2.2

4.4

Transportation Services
OLAM INTERNATION O32

5.33

45.3

45.3

1.8

Food Products
COMFORTDELGRO CO C52

4.37

2.0

2.0

3.4

Travel & Tourism

Source: Bloomberg (data as of 17 April 2014) * note Hutchison Port Holdings Trust also has a Singapore Dollar counter with SGX Code P7VU.

The STI is tracked by two Exchange Traded Funds (ETFs) – the SPDR® STI ETF (SGX: ES3) and the NIKKO AM Singapore STI ETF (SGX:G3B).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.

Over the ten year period ending March 2014, dividends increased the return of the SPDR® STI ETF from 70.7% to 132.8%. The Nikko AM Singapore STI ETF was introduced in 2009. Note the caveat of past performance not guarantying future results also extends to dividends.